"This strategic venture takes us one step closer to our ambition of becoming the worlds' number one tractor manufacturer. Our combined forces with cost/quality advantage would open new markets in our quest for global dominance," Anand Mahindra, vice chairman and managing director of M&M, said at the colourful launching ceremony.
The China operations has been launched through Mahindra (China) Tractor Co Ltd, a joint venture between M&M's 100 per cent subsidiary Mahindra Overseas Investment Co. (Mauritius) Ltd and Jiangling Motor Co Group.
Mahindra (China) Tractor Co Ltd. acquired the tractor manufacturing assets from Jiangling Tractor Company, a subsidiary of JMCG last year.
The plant has a production capacity of 12,000 tractors per annum, company sources told PTI over phone from Nanchang.
At the launching, Anand Mahindra handed over first tractor manufactured in the factory under the new JV to Nanchang Mayor Li Douluo and another tractor to a local farmer.
Mahindra has 80 per cent stake in the joint venture entity, and is investing $8 mn out of the estimated total investment of $10 million.
The balance 20 per cent is held by JMCG, a leading group in tractors and automotive business in Nanchang. The state-owned enterprise, with a turnover of $700 mn, already has JVs with auto majors like Ford and Isuzu for their automotive business.
Mahindra (China) Tractor Co Ltd would cater to the domestic market with 18 to 33 HP under the 'Fengshou' brand and 60 HP tractors under the 'Mahindra' brand. The plant would also export tractors to America, Europe and India to begin with, a company release said.
The ten member board would consist of Anand Mahindra and seven others from M&M and two members from JMCG. Avinash Datta from M&M would head the venture as managing director.
The domestic Chinese market has volumes of around 1,00,000 growing at the rate of six per cent. The first phase of exports would cover select markets in USA, European countries and India.
In American and European countries these tractors would cater to hobby and horticulture farming.
The China operations will help M&M to manage its operational costs and offer the company excellent connectivity and infrastructure, critical to its operations, said Anjanikumar Choudhari, president of M&M's farm equipment sector.
"We are delighted to be here in China. We look forward to participating positively in the government of the People's Republic of China 's efforts to increase the use of modern, fuel efficient tractors in the country," Choudhari said.
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